Since February 2024 authorised firms wishing to approve financial promotions for unauthorised third parties must hold specific permission from the FCA — a requirement that has fundamentally changed who can act as a Section 21 approver and what that role demands.
The Financial Promotions Gateway was introduced by the FCA following a review that identified significant risks from poorly controlled Section 21 approvals — particularly in markets for speculative bonds, mini-bonds and alternative finance products where authorised firms had approved promotions for high-risk issuers without adequate due diligence or ongoing monitoring. The gateway creates a permission-based entry to the approval market and raises the bar for what the FCA expects from approving firms.
What Is the Financial Promotions Gateway?
The gateway is an FCA permission that authorised firms must hold before they can approve financial promotions for unauthorised persons under Section 21 FSMA. The requirement was introduced by the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 and came into force on 7 February 2024.
Before the gateway, any FCA-authorised firm could, by virtue of its authorisation, approve financial promotions from unauthorised third parties without specific permission. This created a market in which some authorised firms operated effectively as professional approvers — approving promotions for fees — without the FCA having a clear supervisory mechanism to assess whether those firms were equipped to carry out the approval function adequately.
The gateway closes that gap. Firms that wish to approve third-party promotions must apply to the FCA for gateway permission, demonstrate that they have the capability and processes to carry out approvals adequately, and operate under ongoing supervisory oversight of their approval function once permission is granted.
Which Firms Need Gateway Permission?
Gateway permission is required by any FCA-authorised firm that approves financial promotions for unauthorised persons. This includes: firms that approve promotions as a commercial service to third-party issuers; firms that approve promotions for companies within their wider group that are not themselves authorised; and firms that approve promotions for appointed representatives whose promotions fall outside the scope of the AR’s appointment.
Firms that communicate their own financial promotions — in their own name, for their own products and services — do not need gateway permission. Their promotions are governed directly by COBS 4 and the financial promotions rules applicable to their regulated activities. The gateway is specifically directed at the approval function for third-party promotions.
Appointed representatives approving promotions within the scope of their appointment operate under their principal’s authorisation and do not need separate gateway permission. The principal firm’s responsibility for AR promotions remains unchanged — if anything, it is heightened by the gateway framework, since principals are expected to have robust oversight of all communications within their AR network.
Transitional Arrangements
Firms that were already approving financial promotions for third parties before 7 February 2024 were given a transitional period to seek gateway permission. During the transitional period — which expired on 6 February 2025 — firms that had submitted a gateway application could continue to approve third-party promotions while their application was pending determination by the FCA.
From 7 February 2025 no firm can approve financial promotions for unauthorised persons without holding gateway permission. A firm that submitted a gateway application before the transitional deadline but whose application is still pending must cease approving third-party promotions if the application has not been determined by the time the transitional period expires, unless the FCA has specifically extended its permission during the application process.
How to Apply for Gateway Permission
Gateway applications are made through the FCA’s online application system. The application requires the firm to provide information about: the types of promotions it intends to approve; the categories of investment to which those promotions will relate; the firm’s governance and approval process; the individuals who will be responsible for carrying out approvals; the due diligence process the firm will apply to issuers and promotions; and the monitoring and withdrawal process for live approved promotions.
The application is assessed by the FCA’s supervision team. The FCA will consider whether the applying firm has the competence and capability to approve the categories of promotion identified, whether its processes are adequate for the risk profile of those categories, and whether the individuals responsible for approvals have appropriate expertise. Applications that do not adequately evidence these matters will be queried or refused.
There is no application fee for gateway permission, but the process involves significant preparation. Firms should expect to prepare a detailed description of their approval process, evidence of the qualifications and experience of those who will conduct approvals, and documentation of their due diligence framework before submitting their application.
What the FCA Assesses
The FCA’s assessment of gateway applications focuses on three core questions. First, does the applying firm have the expertise to assess promotions for the specific investment categories identified? A firm with experience in retail investment promotions may not have adequate expertise to approve cryptoasset promotions, even if both fall within the broad definition of financial promotions. The FCA expects category-specific competence, not generic compliance capability.
Second, are the firm’s approval processes adequate? The FCA expects to see a documented approval framework that covers how promotions are reviewed against COBS 4.2 and applicable product rules, how mandatory disclosures are verified, how approvals are recorded, and how live promotions are monitored for continued compliance. A framework that relies on a single reviewer without independent challenge or quality assurance is unlikely to satisfy the FCA’s expectations for firms approving a significant volume of third-party promotions.
Third, are the firm’s due diligence processes for issuers adequate? The FCA expects approving firms to carry out meaningful due diligence on the firms whose promotions they approve — not merely to review the promotion document itself. This includes understanding the issuer’s business model, regulatory status, and track record, and identifying whether the issuer has been subject to prior FCA attention.
Obligations After Gateway Approval
Holding gateway permission creates ongoing regulatory obligations. Gateway-permission firms must maintain their approval processes to the standard described in their application, notify the FCA of material changes to those processes, and operate under the ongoing supervisory scrutiny of the FCA’s financial promotions supervision team.
The FCA expects gateway firms to have a current register of all third-party promotions they have approved, with a clear audit trail for each approval decision. This register must be available for FCA inspection. Firms that cannot produce contemporaneous records of their approval decisions — or that cannot demonstrate that their process was applied consistently across the promotions they have approved — face significant supervisory risk.
Under the SMCR, the senior manager who holds responsibility for the financial promotions approval function carries personal accountability for the function’s adequacy. Gateway firms should ensure that the relevant SMF holder has sufficient visibility of the approval function, receives regular reporting on approval volumes and decisions, and is promptly informed of any approvals that were subsequently found to be inadequate.
Operating Without Gateway Permission
An authorised firm that approves financial promotions for unauthorised persons without gateway permission from 7 February 2025 is in breach of the financial promotions rules. The FCA can take supervisory action against the firm, including requiring it to withdraw approved promotions, imposing a requirement on its permission, or opening an enforcement investigation. Individual senior managers responsible for the approval function face personal scrutiny under the SMCR Conduct Rules.
Firms that discover they have approved third-party promotions without gateway permission should treat this as a material regulatory breach, consider whether to report it to the FCA under their SMCR obligations, withdraw any currently live promotions approved without permission, and take immediate steps to apply for gateway permission if they wish to continue approving third-party promotions.
Adrian Lawrence FCA — Founder, FD Capital Recruitment Ltd
ICAEW Registered Practice | Companies House No. 13329383
“The gateway has created a distinct compliance specialism — firms that hold gateway permission need people who understand the approval liability in depth, can design and run a robust approval process, and have the editorial and regulatory judgment to approve or decline promotions consistently. We are seeing this as an explicit requirement in compliance hiring briefs from financial promotions houses, investment platforms and firms that approve promotions for group companies.”
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